Mistaken Phil

Join Phil as he attempts to grow his savings by dealing in UK and US shares. Mistakes guaranteed!

Friday, October 04, 2013

Apple wins the device wars

I wrote before that all Apple seems to need to do to win the device wars is to keep on its current trajectory and let the competition make all the mistakes. This still seems to be the case. Let's look at the competition and see what they have been doing.BlackberryLet's start with an easy one. We all know that Blackberry has already lost. Putting all its eggs in the basket of a new technology platform meant that for years it had nothing exciting to ship. And because BB10 (the new platform) has only just come out there are hardly any decent apps available. For most people there is no real reason to buy a Blackberry. The best result Blackberry can hope for is to be an obscure number four in Western markets.MicrosoftMicrosoft is a software company at heart. There is still a big void between their software team and hardware team. They have made the disastrous mistake of trying to ship one platform for both tablets and PCs. This means that the poor Surface designers, having put together some decent hardware, then have to ruin it by putting Windows 8 (or 8.1) on it.The whole concept of Windows 8 is flawed. Tablet users have very different needs to PC users. Trying to satisfy them both in one platform is a huge and ugly compromise. Microsoft is now iterating on this concept by releasing Windows 8.1 and Surface 2. This is known as "polishing a turd."On the phone side reviews of the Lumia range seem to be OK but there seems to be no compelling reason for customers to switch from Android or iOS and take a risk on a new platform. Many of the slightly more obscure apps are not available for Windows Phone.SamsungSamsung has been very aggressive in its attempts to be the number one smartphone maker and has produced some nice phones. I personally use a Galaxy SII and it is a very solid phone. There are two issues I have with Samsung when compared to Apple: brand and innovation.The Apple brand is very strong with teenagers where it is seen as the luxury device. Samsung less so. Even the name "Samsung" sounds clumsy in English. Samsung produce a whole range of phones from budget to high end so this doesn't give the brand any exclusivity.In terms of innovation Samsung seems to struggle somewhat. It relies on Google for the bulk of the platform so there is less scope for differentiation there. When it has attempted to innovate - such as with the "Gear" smart watch - the results have been less than stellar. It is good at putting the Android platform on some nice hardware but has struggled to provide any leadership when it comes to innovation.GoogleGoogle is at heart an internet services company. Everything it does is focused on allowing people to spend more time on the internet. Driver-less cars will enable people to go on-line on the commute to work. The Chrome browser improved the browsing experience. Android made the smartphone ubiquitous.As Google is not a device company at heart it will struggle to put the same passion and energy into their devices as Apple. The Nexus brand is very weak compared to Apple and it has no luxury permutations.AppleMy thoughts about Apple are worthy of a separate article but let's just say that they have the brand, the apps and the innovation. They also have a very cheap share price. Invest!

Thursday, September 12, 2013

The Emperor's New Clothes

Back in 1997 British band Oasis released their third album "Be Here Now". Oasis were at the time riding a wave of popularity and there was so much excitement about the new album that the British media all gave it decent reviews. But in retrospect it is plain to see that it was a turd. The band were high on cocaine while making it and guitarist Noel Gallagher seemed to think that every extra layer of guitar he added made the record better. The result was a mess.The hype about the band stopped the media being objective.I feel the same thing has happened with Windows 8.Let's be real here. Windows 8 is ridiculous. I can't believe that a company filled with intelligent people released such a thing.So you have these millions of Windows power users throughout the world. Over years of using Windows they have built up an extensive array of Windows skills, from keyboard short cuts to advanced skills like setting up networking. This experience is not transferable to the Mac and is a big factor keeping people on Windows.So what do Microsoft do? They release an OS which throws much of that experience in the bin. Now in order to use the modern UI they need to learn a new array of keyboard short cuts and mouse tricks! It would probably by easier to learn to use a Mac!So Microsoft have just discarded one of the biggest moats around their business.When I install a new application on Windows I often add a short cut to it on my desktop. In Windows 7 you just find the application on the Start menu, right click on it, Copy and Paste it on the desktop. Easy. When you install something on Windows 8 there is no short cut to copy in desktop mode. I still haven't figured out an easy way to do this. I am sure that there is an easy way but that is not the point. The point is that my years of Windows experience have been wasted.Most Windows users do not have a touch-enabled screen. And all these users now have to battle their way through a touch interface in order to get their work done. What? Is this how you improve an operating system?If Microsoft had had someone at the top who thought more about user experience then the Windows 8 concept would have died at birth. Instead they had an MBA who thinks that marketing is the answer to every problem.This is why Ballmer went. Windows 8 is shocking.The bizarre thing about the Surface is that it is the software that lets it down. And this from a software company?For the sake of Microsoft's shareholders let's hope they recruit a CEO who thinks about customer experience.

Saturday, August 03, 2013

Steve Ballmer must go

Sorry about the lack of posts recently.However I am still alive and keeping half an eye on the big technology companies I follow.I recently had the misfortune of owning a Microsoft Surface. I got an amazing deal on a Pro at a Microsoft conference so I had to try it.It was awful. Too heavy to be a tablet. Too small to be a laptop. The battery life is poor. No wonder sales have been slow.It is ironic that one of the claims Microsoft made about the Surface was that no compromises were involved. This thing is completely compromised. Even the software is compromised, half being the new touch interface and the other half being the old desktop interface.A shocking statistic was released recently. Microsoft have spent more on marketing their new tablets than they have made from them in revenue.Steve Ballmer seems to think that whatever his products lack in quality he can make up with marketing. But this is obviously not the case. Consumers are not stupid and it is not hard to see that the iPad is a better tablet than the Surface.What should Microsoft have done? Maybe made a touch version of Windows that does not have the desktop mode but does run Office and can connect to Active Directory. Instead they released the mess called Windows 8 that is neither fully touch or fully desktop. Can you imagine Steve Jobs sanctioning such a compromise?I am amazed that Steve Ballmer is still CEO. He has been steering Microsoft in the wrong direction for years.Microsoft have the engineering fire power to build something great. All they need is the right guidance from the top. And it isn't going to come from Ballmer.

Wednesday, October 31, 2012

Tablets

Let the battle begin!

Amazon, Google, Microsoft and Apple have all now announced their tablets for the Christmas market. Finally the iPad has some serious competition. Here are my thoughts.

Kindle Fire

Amazon is a strange beast. It doesn't seem to care about making profits and yet the stock market loves it - giving it a crazy valuation. It doesn't even make sense to talk about the PE ratio as Amazon is not profitable at the moment! The revenue keeps increasing at an impressive rate but how long is Amazon going to be in "invest for the future" mode?

Amazon is selling the Kindle Fire at cost and yet Jeff Bezos has stated that he does not like the "razor and blades" business model. Huh?

The Kindle Fire is cheap but will only be available in markets where customer are able to download movies from Amazon. It will not be a global seller like the iPad. Essentially it is a media consumption device.

There is one aspect of the tablets' specifications that I want to focus on: screen shape. 4:3 is great for surfing and games. 16:9 is great for movies. The Kindle Fire 7 HD has a resolution of 1280 X 800 for a 16 : 10 aspect ration so as expected is better for movies than surfing.

So the Kindle Fire is great for watching movies. But do people really want to watch movies on a 7 inch screen? If you just want to read then you get the cheaper Kindle.

Hmmm. The Kindle Fire may be cheap but I don't really want one.

Google Nexus

Google has just announced the Nexus 10 - more pixels than the iPad 3 at a cheaper price - £319 in the UK. I haven't seen any reviews of the Nexus 10 yet but I think it will be hamstrung by the weak Nexus brand and the fact it is running Android.

The screen shape is the same as the Kindle Fire - best for movies.

Google will sell some Nexus 10s, especially to tech-heads, but I don't think this will be a living room favourite.

Microsoft Surface

At least no one can accuse Microsoft of copying Apple with the Surface. It is a hybrid device really - half tablet and half PC. It is priced the same as the full size iPad. However to seriously use the bundled Office applications you will need a cover which will set you back another $100.

The target market for the Surface seems to be students - people who can't afford two computers so need a tablet / PC hybrid that can be used for work and fun.

The eternal problem with hybrids is that they don't do anything really well. The Surface isn't going to be as useful as a laptop thanks to its smaller screen and keyboard. It isn't going to be as fun as an iPad as it is bigger and doesn't have the apps.

Finally the screen aspect ratio is 16 : 9. I really dislike this screen shape - the screen is either too wide or too narrow depending on which way round you hold the tablet.

Microsoft will sell quite a few tablets but they will probably by cannibalising their own PC market rather than the iPad market.

The Surface was a necessary step for Microsoft and they should be applauded for doing something a bit different. However I don't want one.

Apple iPad

Apple does it again. The first reviews of the iPad Mini are out and it look like a hit. The small size and weight are a huge bonus apparently. The only negative is the non-retina display but this is only a problem to people used to HD displays.

It has the apps. It has the right screen shape.

Apple also doubled the speed of its full size iPad while keeping the price the same.

I want one. The only question is which one?

Conclusion

The Kindle Fire is one-dimensional, the Nexus 10 is obscure, the Surface is weird and the iPad is desirable.

Friday, August 31, 2012

Windows Hate

The latest Windows release - Windows 8 - is nearly upon us. What are Microsoft going to inflict on us this time?

They have been bold - very bold. There is a new Windows engine - Windows RT - which is Microsoft's version of iOS, and the old desktop style programs all run within a desktop app.

Due to this architecture the "Start" button has been removed as the desktop is no longer the start screen. The tiled Windows RT home is the start screen.

Microsoft is using the "Windows RT" label to refer to the ARM version but I will use it to refer to the "Metro" engine that is on Windows RT and Windows 8.

There are some very strange things going on here.

Firstly Windows 8 is now two platforms in one - RT and desktop. The ARM tablets will just have the RT bit but all other products will have both.

Secondly, Windows has deprecated windows! What I mean is that one of the great things about Windows was that each application ran in its own window making it easy to switch between applications and drag and drop between them. In Windows RT apps are full screen by default and the only other option is side by side. No tiling of windows. No more than two windows on the screen at a time. It will almost be like DOS!

Thirdly, RT is designed for touch screens so on a laptop you have to learn a large set of key combinations in order to get the best out of it. Windows power users are going to feel like babies all over again.

The one thing that is easy to predict is lots of confusion!

I heard a rumour that internal politics at Microsoft prevented them from branching Windows 7 into Windows 8 and Windows RT. The Windows 8 team didn't want to be left with the legacy product while the RT team got to work on the new, exciting platform. But by keeping both platforms together you are left with a bit of a mess.

One argument for keeping them together is that the x86 tablet can run legacy Windows applications. The problem with that is that old Windows apps are not designed for touch input. I guess that is why Microsoft is pushing its new "PC tablet" format where tablets are easily converted to a laptop by docking them.

I have spoken before about the problem of using a 10 inch screen as a productivity tool. If someone brings out a 14 inch Windows 8 tablet in convertible form that would be very interesting but I haven't seen one yet.

Another issue with Windows RT will be the lack of apps as the store has got to start from scratch. I imagine that apps will appear pretty quickly but it will not get close to the number of iPad apps for a long time.

The big question is how much will the flagship device - the Surface cost? If it is priced competitively with the iPad then it could get some real traction. However it will not have a retina screen or the choice of apps.

From an investing point of view I am much more excited about AAPL than MSFT. AAPL know how to focus on keeping devices simple, they have an exciting roadmap (or so the executives keep telling us) and the iPad has no peer in the tablet world.

Saturday, June 30, 2012

BlackBerry When?

It seems that most of the time Apple just needs to keep on its current trajectory and let its competitors make error after error as they try to catch up.

Most catastrophic of all is BlackBerry who have just announced another delay to its new platform - BB10 - until after the Christmas season.

As a software engineer myself I find it impossible to understand how BlackBerry can blunder so badly. I can only conclude that the previous directors, and maybe the current ones, do not understand software. And BlackBerry is a software company as much as a hardware company.

The thing about software is that it is enormously difficult to develop quality software. Failed software projects litter the history of computing.

One way to mitigate the risk is to continue with a working product and make incremental changes. This is how Apple works with iOs and OSX. The problem with the incremental approach is that it is rather dull and developers love nothing more than building their own solutions from scratch.

Throwing away your old product to build a new one is described by respected software guru Joel Spolsky as the worst strategic decision a software company can make - see here.

If you must develop a completely new product then you continue developing the old product in parallel so that you still have something to ship if the new project is delayed. This is how Apple managed the transition to Intel processors.

It seems that the BlackBerry management were unaware of the enormous risk involved in moving to a new platform and have put all their eggs in the BB10 basket.

So now, while Apple and Android are devouring their market share, they have nothing exciting to ship until next year!

It is no good talking about what a great platform BB10 will be - most customers do not care about geeky things like HTML 5 and Flash. What customers are interesting in is the form factor, the speed of the phone, the number of apps available and the size of the screen.

With that in mind get this - BB10 will not run existing BlackBerry apps!

From an investment point of view I would not go anywhere near RIMM. It may look cheap based on some investment metrics but this ship is nowhere near turning around. Ugly!

Wednesday, June 20, 2012

Focussed on the Surface

Microsoft have finally listened to the advice on my blog and taken control of the hardware as well as the software. And so we have the "Surface", Microsoft's own tablet - except that they like to call it a PC.

Is it going to be a success?

I think it will be a moderate success, partly due to the marketing muscle Microsoft will put into it and partly because it appears to be a well built device.

However in my opinion it has a "designed by committee" feel to it.

In the Steve Jobs era Apple never used focus groups. That is because Steve himself knew exactly what made a great device. He had the strength of character to drive forward a vision and ignore the thousands of distractions that present themselves along the way.

That "no compromise" approach is what results in insanely great products. That is why the iPad is a great tablet - it is not trying to be anything else.

The Surface, however, is trying to be a PC. It appears that Microsoft have put a lot of thought into the cover which doubles as a keyboard and touch pad. The problem is that the keyboard will not be as good as one built into a laptop so you are not going to buy a Surface to use as your main productivity machine. Especially when the screen is less than 11 inches in size. The idea of a tablet is that you can easily use it when you are sat down or even lying down. When used in this way the keyboard has no purpose. So for a tablet the keyboard is not that important - but with the Surface the cost of one will be included with the product.

The Surface also has a number of ports such as USB and HDMI. This means wires attached to your tablet. Wires! Wires are so last century!

Most unbelievably the Surface comes with a stylus - even after Apple have already proved that people prefer to use their fingers. How to you do multi-touch with a stylus? Will it come with extra styluses in case you keep losing them?

Every feature that a product contains represents a trade-off against the simplicity and purity of the device. At the very least it will add to the weight and cost of the unit. To keep a device simple requires tremendous passion and drive. That is what Steve Jobs had and it seems the Tim Cook learnt from him well. But does anyone at Microsoft understand this?

Having said all that, the Surface does look like a decent attempt at a business tablet and will probably sell well to the corporate sector. But I don't think it will make a dent to Apple's iPad sales. In fact it may increase them as it generates more publicity for the tablet sector of the market.